Acting New York Attorney General Barbara Underwood announced today a request for public comment as part of the office’s review of the $3.75 billion sale of substantially all of the assets of the New York State Catholic Health Care Plan, Inc. d/b/a Fidelis Care New York (“Fidelis”) to Centene Corporation (“Centene”). Most of the proceeds of the sale will be used to create an endowment for the new Mother Cabrini Health Foundation.
“This will be the largest charitable transaction in the history of the Attorney General’s office,” Acting Attorney General Underwood said. “Our office is committed to ensuring that the new foundation continues Fidelis’ critical mission of providing safety net health care to vulnerable New Yorkers. We have already undertaken significant measures to assure continued access to quality, affordable health care, and encourage New Yorkers to make their voices heard during this comment period.”
In April 2018, the New York State Department of Health and the New York State Department of Financial Services approved transfer of the managed care plans owned and managed by Fidelis to Centene Corporation, a for-profit company.
Under the Not-for-Profit Corporation Law, the proceeds of the sale of charitable assets belong to the charity and must be used to further its charitable mission. The Attorney General is responsible for reviewing the transaction to determine whether the price and terms of the sale are fair and reasonable, and whether the purposes of the charity will be promoted by the sale.
The Charities Bureau has been conducting an extensive review of the Fidelis petition under Section 511-a of the Not-For-Profit Corporation Law. The petition is now being made available for public comment through May 23, 2018 at https://ag.ny.gov/Fidelis.
Because of Fidelis’ important role in providing safety net health care for New Yorkers, the Attorney General’s office has secured a number of commitments from Centene as part of her office’s review of the sale. Those commitments include requiring Centene to:
- continue to provide services and enroll members in every county in which Fidelis currently operates;
- continue Fidelis’ current network of providers and ensure that those providers will be paid the same rate for at least three years;
- and provide funds for an independent health care expert (chosen by the Attorney General’s office) to review whether the health care services being provided are consistent with those provided by Fidelis and that Centene’s commitments are being honored.
Under the proposed transaction, Fidelis will transfer the proceeds of the sale to a new health care foundation, Mother Cabrini Health Foundation, Inc. This Foundation will provide grants to address the health care needs of vulnerable New Yorkers, including social determinants of health. The Foundation’s plan for use of the sale proceeds is set forth in the petition beginning at paragraph 147. In addition, the Foundation will transfer to the State of New York $1.4 billion for use by the State in addressing the health needs of vulnerable New Yorkers; the State has agreed to provide sufficient information to the Charities Bureau to assure that this undertaking is honored.
The Charities Bureau will review all public comments prior to making a final decision on the Fidelis petition.